Startups flipping to India gain pace in fintech, other segments

Flipkart-backed PhonePe last year decided to domicile in India after paying a billion dollars in tax, and several others, including Razorpay, Groww and Pine Labs, have showed interest in doing so

- Ranjani Raghavan, Sneha Shah, Arti Singh

Several Indian fintech startups domiciled abroad are considering shifting their base to India, investors and startup founders said, as they seek to gain regulators’ confidence and prepare for public markets. Despite the hefty tax bill on such shifting, more sectors such as consumer tech and health tech may consider a similar move in the near future, they said.

Flipkart-backed PhonePe last year decided to domicile in India after paying a billion dollars in tax, and several others, including Razorpay, Groww and Pine Labs, have showed interest in doing so, the people cited above said on condition of anonymity. The companies did not respond to requests for comment.

Companies in regulated sectors believe the shift will help in compliance with local laws, while others believe it will help at the time of listing in India.

“Regulated entities are likely to move to India to scale their businesses by complying with regulations and aligning their interests with the regulator’s policy intent, while consumer companies may relocate to take advantage of India’s attractiveness, especially while listing at IPO, as the country will already have a sizable investor base familiar with their brand," said Gopal Srinivasan, chairman and managing director of TVS Capital.